By Wolf Richter: Putzmeister was a paragon of the German Mittelstand—family-owned companies with innovative technologies and high-quality manufacturing that become worldwide players in niche markets that they dominate. They’re at the core of the German export economy. But in early 2012, like so many other Mittelstand companies, it was acquired by a Chinese giant. And now, a year later, Putzmeister CEO Norbert Scheuch reveals just how impossible integration is, and how pessimistic he has become not only about Europe, but the rest of the world, particularly China.
The company was founded by Karl Schlecht in 1958. First product: an automated mortar machine, ideal for the post-World War II construction boom. Soon Putzmeister expanded into concrete pumps—truck-mounted equipment with articulated masts that can pump liquid concrete. Over time, it developed larger pumps with unique technologies and record setting performances. In the 1970s, it expanded into the rest of Europe; in the 1980s, into the US; in the 1990s, into Japan, China, Russia.... It had become a worldwide player. In 2012, it had about 3,000 employees, but only 1,100 in Germany.
Michael Snyder: Why is the global economy in so much trouble? How can so many people be so absolutely certain that the world financial system is going to crash? Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail. In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts. So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts. Overall, there is about 190 trillion dollars of total debt on the planet. But global GDP is only about 70 trillion dollars. And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars. So we have a gigantic problem on our hands. The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives. We are living in the greatest financial bubble in world history, and it isn't going to take much to topple the entire thing. And when it falls, it is going to be the largest financial disaster in the history of the planet.